Team Reports Wider Loss in Q1, Eyes 15% EBITDA Growth in 2025

Core Viewpoint - Team, Inc. reported mixed results for Q1 2025, with strong performance in the Inspection and Heat Treating (IHT) segment offset by weakness in the Mechanical Services (MS) segment, while the company is optimistic about future growth driven by strategic initiatives and operational improvements [13]. Financial Performance - Total revenues for Q1 2025 were $198.7 million, slightly down from $199.6 million in the same quarter of 2024 [2]. - The net loss widened to $29.7 million, or $6.61 per share, compared to a loss of $17.2 million, or $3.89 per share, in Q1 2024 [2]. - Adjusted EBITDA decreased to $5.3 million from $6.5 million year-over-year, with the margin narrowing to 2.7% from 3.3% [2]. Segment Performance - The IHT segment saw revenues rise by 6.8% year-over-year to $106.2 million, driven by an 8.8% increase in U.S. operations and a 39% improvement in adjusted EBITDA [3]. - The MS segment experienced a 7.7% revenue decline to $92.4 million, resulting in an operating loss of $1.1 million, down from an income of $4.1 million in the prior year [4]. Cost Management - The company-wide gross margin decreased to 23.8% from 24.4%, while SG&A expenses fell by 3.4% to $53.3 million, indicating modest operational efficiencies [5]. - Management initiated a cost optimization initiative targeting annualized savings of at least $10 million [9]. Management Insights - CEO Keith Tucker noted that Q1 results were impacted by seasonality and severe winter weather, but expressed confidence in robust activity levels for Q2 and full-year growth expectations [6]. - CFO Nelson Haight highlighted consistent execution and improving performance as key factors in the recent refinancing deal, with expectations for continued annual improvement in adjusted EBITDA [7]. Strategic Initiatives - The company completed a refinancing in March 2025, extending loan maturities to 2030 and lowering the blended interest rate by over 100 basis points, which improved financial flexibility [12]. - Management reaffirmed its commitment to achieving at least 15% growth in adjusted EBITDA for the full year, supported by margin improvements and steady revenue gains [10][11].